Great news! White House finds new ways to soak the wealthy

Jazz ShawPosted at 1:01 pm on April 6, 2013

We’ve already had some chatter about President Obama’s new “blow your mind” budget proposal. As Erika pointed out, there’s still plenty of taxy goodness in it, but more details are beginning to emerge. The Hill has latched on to one of the really insulting ones which, unlike in Obamacare, we may actually read and find out about before we vote on it.

President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.

The proposal would save around $9 billion over a decade, a senior administration official said, while also bringing more fairness to the tax code.

The senior administration official said that wealthy taxpayers can currently “accumulate many millions of dollars in these accounts, substantially more than is needed to fund reasonable levels of retirement saving.”

I don’t know about you, but I think this is simply fabulous. It’s got almost everything you could want in an example of liberal tax theory. You see, some people will be able to stash away as much cash toward retirement as they can manage, assuming they somehow still have a job. But not everyone. So how do you draw that line in the sand as to who gets to plan for their golden years and how much you really need for retirement? Don’t worry your pretty little head about it, sweetheart. Uncle Sam will make the call for you!

But what is the theory behind even trying a stunt like this in the first place? Apparently, the government will “save” money by not letting certain unpopular individuals defer or avoid taxes on income in retirement savings. How much? Go back and read the first quoted paragraph above. We’re talking about nine billion dollars over ten years. That’s $900M each year toward paying our bills… or less than the amount we’ll probably spend to save the lesser prairie chicken next year.

The cigarette tax, the official said, would fund the universal pre-kindergarden education program Obama proposed in the State of the Union. A White House official on Friday declined to give details on the rate or extent of the new cigarette tax ahead of the official budget release.